A theoretical model suggesting the mechanistic pathway for the oxidation of saturated alkanes to their corresponding alcohols and ketones is described. Water oxide (H2O-O) is employed as a model singlet oxygen atom donor. Molecular orbital calculations with the 6-31G* basis set at the MP2, QCISD, QCISD(T), CASSCF, and MRCI levels of theory suggest that oxygen insertion by water oxide occurs by the interaction of an electrophilic oxygen atom with a doubly occupied hydrocarbon fragment orbital. The electrophilic oxygen approaches the hydrocarbon along the axis of the atomic carbon p orbital comprising a pi(CH2) or pi(CHCH3) fragment orbital to form a carbon-oxygen sigma bond. A concerted hydrogen migration to an adjacent oxygen lone pair of electrons affords the alcohol insertion product in a stereoselective fashion with predictable stereochemistry. Subsequent oxidation of the alcohol to a ketone (or aldehyde) occurs in a similar fashion and has a lower activation barrier. The calculated (MP4/6-31G*//MP2/6-31G*) activation barriers for oxygen atom insertion into the C-H bonds of methane, ethane, propane, butane, isobutane, and methanol are 10.7, 8.2, 3.9, 4.8, 4.5, and 3.3 kcal/mol, respectively. We use ab initio molecular orbital calculations5 in support of a frontier MO theory that provides a unique rationale for both the stereospecificity and the stereoselectivity of insertion of electrophilic oxygen and related elcectrophiles into the carbon-hydrogen bond.